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“Raising money for a cause these days has become much like trying to walk up a “down” escalator while it is accelerating. It’s getting tougher just to break even and much easier to fall behind. “The problem is not that [charities are] not getting new money; the problem is that they’re losing an enormous amount of money,” says Bill Levis, the author of a new pilot survey by the Urban Institute that documents the trend. Levis’ survey shows that most nonprofits post an average gain of just 10 percent each year: they lose 52 percent of their donations, which is then offset by a 62 percent gain in new or upgraded donations. In short, says Levis, nonprofits are losing almost as much as they’re gaining, pouring a river of money into a nearly open drain.

And

“Of the donors who withdrew support, 47 percent did so because they felt uninformed or unappreciated.”

• As a nonprofit, what are you doing to keep your current donors engaged and spreading the word? Request for money letters do not count.
• How open are your books? Do you show your donors where their money is going? Donors want transparency. If you do not give it to them, they will go elsewhere.
• Do you send thank you letters and emails for all donations? Even the ones as low as $25? Recently, I made small donations to numerous nonprofits. About a third did not send even an email thank you note.
• What are you doing to reward the small donors? T-shirts, DVDs, and trinkets are somewhat effective; but are boring. Think outside the box. (I’m biased. I know cash rewards always get people of all income brackets interested. They can keep the cash rewards or give them away to the charity.)
• What are you doing to make your organization different that the other 1.3 million 501(c)3 other nonprofits? For example, did you know that there are over 7,000 501(c)3 nonprofits in Cincinnati, OH?

There is an old business maxim that states to do whatever it takes to keep an existing customer………as the cost of keeping one is cheaper that the cost of getting a replacement.

Over two years ago, we started a nonprofit with a new idea…create an incentive for donors to give more to their favorite charities. After extensive listening to donors about what they wanted from their nonprofits….we created www.echoDonations.org.™

Let the echo blogging begin!From time to time, the team behind the scene at echoDonations.org will be sharing with you their thoughts and comments. I’m surrounded by a very talented team of associates, advisors and vendors. We have a lot to share about what we have built here and where we are headed.

Hummm….I should introduce myself; I am Christopher Hytry Derrington, member of the Board of Directors. When people ask what I do, I state “I build technology start-ups.” I enjoy taking good technology ideas, figuring out the potential product mix, building the team, raising the capital, “stirring it all in a big bowl,” and hopefully, out of the oven pops a new company.

So what does my boring personal bio have to with charity giving???

Simple. Two years ago, I was exposed to the world of nonprofits for the very first time. Observing for numerous months the professional fundraisers’ focus on raising large amounts of money from only wealthy people….. I asked a question that really NO ONE had a good answer to: ”Why are only the “rich and famous” getting all the tax breaks and estate savings from charity giving?”

The lack of a good answer led to additional questions: ”What is being done to give the same financial rewards to the general public donors who give small donations?” and “How can we give similar financial rewards to reward them for their giving while incentivizing them to give more to their favorite causes?”

The answers I heard from the old-school fundraising professionals went like this: “Small donors giving $25 take too much time,” or “We want the 20 and 30 year-old donors to pay our light bills and salaries. When they are 40 to 60 years old and have wealth, then we are really interested in them to build our endowment.” or “It’s not cost effective to process small donations into trust accounts unless the amount is $25,000.”

Reminder earlier where I said I’m a technology guy? Well, AN IDEA came to me like the proverbial light bulb…….”Hey, let’s use Internet web-based software to create an online, paperless, donation processing system that accepts donations as low as $25, allow the donor to split or give away the cash rewards, and helps makes nonprofits stronger.”

Yeah, right. How was I going to do that? The technology part was easy; the nonprofit expertise was going to be the hard part. So I asked very smart nonprofit experts to become partners and advisors.

And the rest is history….It took two years of hard work and gallons of caffeine beverages to accomplish the goal. I’m proud to state that we have created the world’s first charitable mutual fund. It’s a win-win for both the donor and his or her favorite nonprofits.

So let me take a minute to say thanks to all of you who worked diligently to build echoDonations.org. And to the investors that help fund the project. And a special “thank you” to the hundreds of folks who participated in the focus groups, one-on-one marketing sessions and endless product testing. We listened to everything you had to say and endeavored to incorporate all of your invaluable feedback.